UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 
 WASHINGTON, D.C. 20549
 
 FORM 10-K
 
 x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 
 or
 
 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934
 
 For the transition period from _____ to _____
 
 Commission File No. 000-51926
 
 RIDGEWOOD ENERGY P FUND, LLC(Exact name of registrant as specified in its charter)
 
 Delaware

86-1133315(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)
 
 14 Philips Parkway, Montvale, NJ  07645(Address of principal executive offices) (Zip code)(800) 942-5550(Registrant’s telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act: None
 Securities registered pursuant to Section 12(g) of the Act:
 
 Shares of LLC Membership Interest
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes  o  No  x
 
 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.     Yes  o   No  x
 
 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.     Yes  x   No  o
 
 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes o      No o
 
 Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.      x
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large accelerated filer
o
Accelerated filer
oNon-accelerated filer

(Do not check if a smaller reporting company)
o
Smaller reporting company
x
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes  o   No  x
 
 There is no market for the shares of LLC Membership Interest in the Fund.  As of March 22, 2011 there are 933.06 shares of LLC Membership Interest outstanding.
  
 
  
 RIDGEWOOD ENERGY P FUND, LLC
 2010 ANNUAL REPORT ON FORM 10-K
 TABLE OF CONTENTS
  PAGEPART IITEM 1
BUSINESS
2ITEM 1A
RISK FACTORS
11ITEM 1B
UNRESOLVED STAFF COMMENTS
11ITEM 2
PROPERTIES
11ITEM 3
LEGAL PROCEEDINGS
12ITEM 4
(REMOVED AND RESERVED)
12PART IIITEM 5
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND

ISSUER PURCHASES OF EQUITY SECURITIES
12ITEM 6
SELECTED FINANCIAL DATA
12ITEM 7
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS
12ITEM 7A
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
18ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
18ITEM 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE
18ITEM 9A
CONTROLS AND PROCEDURES
18ITEM 9B
OTHER INFORMATION
19PART IIIITEM 10
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
19ITEM 11
EXECUTIVE COMPENSATION
20ITEM 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND

RELATED STOCKHOLDER MATTERS
20ITEM 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
21ITEM 14
PRINCIPAL ACCOUNTING FEES AND SERVICES
21PART IVITEM 15
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
22SIGNATURES
23
  Table of Contents
  FORWARD LOOKING STATEMENTS
 
 Certain statements in this Annual Report on Form 10-K (“Annual Report”) and the documents Ridgewood Energy P Fund, LLC (the “Fund”) has incorporated by reference into this Annual Report, other than purely historical information, including estimates, projections, statements relating to the Fund’s business plans, strategies, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 that are based on current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. You are therefore cautioned against relying on any such forward-looking statements. Forward-looking statements can generally be identified by words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “target,” “pursue,” “may,” “will,” “will likely result,” and similar expressions and references to future periods.  Examples of events that could cause actual results to differ materially from historical results or those anticipated include weather conditions, such as hurricanes, changes in market conditions affecting the pricing of oil and natural gas, the cost and availability of equipment, and changes in governmental regulations.  Examples of forward-looking statements made herein include statements regarding future projects, investments and insurance.  Forward-looking statements made in this document speak only as of the date on which they are made.  The Fund undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
 
 WHERE YOU CAN GET MORE INFORMATION
 
 The Fund files annual, quarterly and current reports and certain other information with the Securities and Exchange Commission (“SEC”). Persons may read and copy any materials the Fund files with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington D.C. 20549, on official business days during the hours of 10 a.m. to 3 p.m. Eastern Time. Information may be obtained from the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
       1
 Table of Contents
 PART I
 
 ITEM 1.  BUSINESS
 
 Overview
 
 The Fund is a Delaware limited liability company (“LLC”) formed on March 21, 2005 to primarily acquire interests in oil and natural gas properties located in the United States offshore waters of Texas, Louisiana and Alabama in the Gulf of Mexico.
 
 The Fund initiated its private placement offering on May 16, 2005, selling whole and fractional shares of LLC membership interests (“Shares”), primarily at $150 thousand per whole Share. There is no public market for the Shares and one is not likely to develop. In addition, the Shares are subject to material restrictions on transfer and resale and cannot be transferred or resold except in accordance with the Fund’s limited liability company agreement (the “LLC Agreement”) and applicable federal and state securities laws. The private placement offering was terminated on October 30, 2005.  The Fund raised $138.3 million and after payment of $22.2 million in offering fees, commissions and investment fees, the Fund had $116.1 million for investments and operating expenses.
 
 Manager
 
 Ridgewood Energy Corporation (the “Manager” or “Ridgewood Energy”) was founded in 1982. The Manager has direct and exclusive control over the management of the Fund’s operations. With respect to project investment, the Manager locates potential projects, conducts due diligence and negotiates and completes the transactions in which the investments are made. This includes review of existing title documents, reserve information, and other technical specifications regarding a project, and review and preparation of participation agreements and other agreements relating to an investment.  Additional information regarding the Manager is available through its website at www.ridgewoodenergy.com.  No information on such website shall be deemed to be included or incorporated by reference into this Form 10-K.
 
 The Manager performs, or arranges for the performance of, the management, advisory and administrative services required for Fund operations. Such services include, without limitation, the administration of shareholder accounts, shareholder relations and the preparation, review and dissemination of tax and other financial information. In addition, the Manager provides office space, equipment and facilities and other services necessary for Fund operations. The Manager also engages and manages the contractual relations with unaffiliated custodians, depositories, accountants, attorneys, broker-dealers, corporate fiduciaries, insurers, banks and others as required.
 
 The Fund is required to pay all other expenses it may incur, including insurance premiums, expenses of preparing and printing periodic reports for shareholders and the SEC, commission fees, taxes, third-party legal, accounting and consulting fees, litigation expenses and other expenses. The Fund is required to reimburse the Manager for all such expenses paid on its behalf.
 
 As compensation for its services, the Manager is entitled to an annual management fee, payable monthly, equal to 2.5% of the total capital contributions made by the Fund’s shareholders, net of cumulative dry-hole and related well costs incurred by the Fund.  The Manager is entitled to receive an annual management fee from the Fund regardless of the Fund’s profitability in that year.  Management fees for each of the years ended December 31, 2010 and 2009 were $1.7 million.  Additionally, the Manager is entitled to receive a 15% interest in cash distributions made by the Fund.  Distributions paid to the Manager for the years ended December 31, 2010 and 2009 were $0.9 million and $0.3 million, respectively.
 
 Business Strategy
 
 The Fund’s primary investment objective is to generate cash flow for distribution to its shareholders by generating returns across a portfolio of exploratory or development stage shallow water or deepwater oil and natural gas projects.  Distributions are funded from cash flow from operations, and the frequency and amount are within the Manager’s discretion subject to available cash from operations, reserve requirements and Fund operations.  The Fund invests in the drilling and development of both shallow and deepwater oil and natural gas projects in the U.S. offshore waters of Texas, Louisiana, and Alabama in the Gulf of Mexico, in partnership with exploration and production companies.  Although the Fund’s focus is primarily on exploratory oil and natural gas projects, it also investigates and, if appropriate, invests in non-exploratory projects, such as producing projects and projects that have proven undeveloped reserves, some of which may need capital to construct, install or acquire the necessary infrastructure assets, such as rigs, pipelines or other equipment needed to gather, process and transport oil or natural gas.  Some of these non-exploratory projects may also contain probable or possible reserves, which could be a factor in the purchase price paid by the Fund to acquire such projects.  The Fund rigorously screens and evaluates non-exploratory projects using the same investment screening and selection process used for exploratory stage projects, although, depending on the nature and type of a non-exploratory project, additional or different evaluative tools and processes may be needed by the Fund when evaluating such projects.
  2
 Table of Contents
  Investment Strategy
 
 The Fund invests its capital with operators through working interest with such operators and, in some cases, other energy companies that also own or acquire working interests in the projects.  A working interest is an undivided fractional interest in a lease block acquired from the U.S. government or from an operator that has acquired the working interest.  A working interest includes the right to drill, produce and conduct operating activities and share in any resulting oil and natural gas production. Operators will generally retain 25% to 50% interests in multiple drilling projects, rather than 100% interests in a few projects, in order to share risk, obtain independent technical validation and stretch exploration budgets that are split across numerous regions of the world.Ridgewood Energy evaluates each project and its operator on an individual project basis, allowing the Fund to invest in what Ridgewood Energy believes are the projects with the most attractive risk/reward ratios.  Critical to the success of this approach is the ability of Ridgewood Energy to diversify the Fund’s portfolio across project types and operators.  Attributes sought in projects for investment include: depth of scientific analysis and preparation; strong potential project economics and favorable operating agreement terms; similarity to existing producing properties; and expertise of the operator in the proposed region/geology/technical environment.  Attractive characteristics of potential and existing operators include industry contacts and relationships, sophisticated geological and geophysical teams and a strong track record of success.  For certain of the Fund’s investments, the Fund may pay the operator a “promote” on the cost of the initial exploratory well, representing a larger share of the drilling costs.  For a successful well, all of the Fund’s subsequent costs, including completion costs for the exploratory well, the costs of all development wells, infrastructure costs such as production platforms and pipelines, and day-to-day operating costs for the life of the project, would be paid on a proportionate basis to its working interest ownership.
  Investment Process
 Although Ridgewood Energy’s model of investing fund capital with operators affords it access to industry-leading technical and engineering resources, Ridgewood Energy performs its own due diligence on, and independently evaluates, all of the projects in which the Fund invests and all investment decisions are based on the collective analysis of the Ridgewood Energy management team.  The Ridgewood Energy management team conducts an initial screening process to identify new project investment opportunities utilizing their training, experience and industry relationships.  Ridgewood Energy is selective as to which projects it pursues.  Key criteria that form part of the detailed evaluation include the identity of the operator and other partners, the technical quality of the project, access to existing infrastructure, drilling schedule and rig availability and project economics and terms.
 
 Ridgewood Energy maintains an investment committee consisting of five members, which provides operational, financial, scientific and technical oil and gas expertise to the Fund (the “Investment Committee”).  Four members of the Investment Committee are based out of the Manager’s Montvale, New Jersey office and one member is based out of the Manager’s Houston, Texas office.  Once the technical and economic analyses of a potential project are complete and a project has been deemed to satisfy Ridgewood Energy’s technical criteria, provide an attractive economic risk/reward ratio, and fit within Ridgewood Energy’s diversification strategy, final investment approval is made by the Investment Committee.  When reviewing a project for final investment approval, the Investment Committee seeks to balance the economics of the projects, the potential sizes of the projects, the diversity of the operators, and the likely timing of new projects.  The Investment Committee also considers the geological, financial and operating risks of the proposed project and compares these risks to the existing portfolio of Ridgewood Energy projects.  The Investment Committee further focuses on the initial well cost relative to the overall revenue potential of the project.
 
 Participation and Joint Operating Agreements
 Once Ridgewood Energy decides that a project is an appropriate investment for the Fund, the Fund will seek to enter into participation and joint operating agreements with the other working interest owners in a lease.  Ridgewood Energy negotiates these agreements with the goal of achieving the best possible economics and governance rights for the Fund in connection with acquiring the interest.  Under the joint operating agreement, proposals and decisions are made based on percentage ownership approvals and although an operator’s percentage ownership may constitute a majority ownership, operators generally seek consensus relating to project decisions.  As a result, Ridgewood Energy and other partners generally retain the right to make proposals and influence decisions involving certain operational matters associated with a project.  This approval discretion and the operator’s desire to execute the project efficiently and expeditiously can function to limit the operator’s inclination to act on its own, or against the interests of the participants in the project.
  3
 Table of Contents
  Project Information
 
 Existing projects, and future projects, if any, are located in the waters of the Gulf of Mexico offshore from Texas, Louisiana and Alabama, in state waters or on the Outer Continental Shelf (“OCS”). The Outer Continental Shelf Lands Act (“OCSLA”), which was enacted in 1953, governs certain activities with respect to working interests and the exploration of oil and natural gas in the OCS.  See further discussion under the heading “Regulation” in Item 1. “Business” of this Annual Report.
 
 Leases in the OCS are generally issued for a primary lease term of 5, 8 or 10 years, depending on the water depth of the lease block. The 5-year lease term is for blocks in water depths generally less than 400 meters, 8 years for depths between 400 meters and 800 meters and 10 years for depths in excess of 800 meters. During a primary lease term, except in limited circumstances, lessees are not subject to any particular requirements to conduct exploratory or development activities. However, once a lessee drills a well and begins production, the lease term is extended for the duration of commercial production.
 
 The lessee of a particular block, for the term of the lease, has the right to drill and develop exploratory wells and conduct other activities throughout the block. If the initial well on the block is successful, a lessee, or third-party operator for a project, may conduct additional geological studies and may determine to drill additional or development wells. If a development well is to be drilled in the block, each lessee owning working interests in the block must be offered the opportunity to participate in, and cover the costs of, the development well up to that particular lessee’s working interest ownership percentage.
 
 Royalty Payments
 Generally, working interests in an offshore oil and natural gas lease under the OCSLA pay a 16.67% or 18.75% royalty to the Bureau of Ocean Energy Management, Regulation and Enforcement (“BOE”) (formerly the Mineral Management Services) for shallow-water projects, dependent upon the lease date, and a 12.5% royalty to the BOE for deepwater projects. Therefore, the net revenue interest of the holders of 100% of the working interest in the projects in which the Fund will invest is between 81.25% and 83.33% of the total revenue for shallow-water projects and 87.5% of the total revenue for deepwater projects, and, such net revenue amount is further reduced by any other royalty burdens that apply to a lease block.  However, as described below, the BOE has adopted royalty relief for existing OCS leases for those who drill deep oil and natural gas projects.  Other than BOE royalties, the Fund does not have material royalty burdens.  In addition to the foregoing, the Fund’s working interests in leases located in state waters of the Gulf of Mexico, offshore Louisiana, pay a 25% royalty to the State of Louisiana.
  Deep Gas Royalty Relief
 On January 26, 2004, the BOE promulgated a rule providing incentives for companies to increase deep natural gas production in the Gulf of Mexico (the "Royalty Relief Rule"). Under the Royalty Relief Rule, lessees are eligible for royalty relief on their existing leases if they drill and perforate wells for new and deeper reserves at depths greater than 15,000 feet subsea. In addition, an even larger royalty relief is available for wells drilled and perforated deeper than 18,000 feet subsea. The Royalty Relief Rule does not extend to deep waters of the Gulf of Mexico off the Continental Shelf nor does it apply if the price of natural gas exceeds $10.57 (estimated) Million British Thermal Units (“mmbtu”), adjusted annually for inflation. The Royalty Relief Rule is limited to leases in a water depth less than 656 feet, or 200 meters.
 
 Deepwater Royalty Relief
 In addition to the Royalty Relief Rule promulgated by the BOE, the Deep Water Royalty Relief Act of 1995 (the “Deepwater Relief Act”) was enacted to promote exploration and production of oil and natural gas in the deepwater of the Gulf of Mexico and relieves eligible leases from paying royalties to the U.S. Government on certain defined amounts of deepwater production.  The Deepwater Relief Act expired in the year 2000 but was extended for qualified leases by the BOE to promote continued interest in deepwater.  For purposes of royalty relief, under the Deepwater Relief Act, the BOE defines deepwater as depths in excess of 656 feet, or 200 meters.  In order for a lease to be eligible for royalty relief under the Deepwater Relief Act, it must be located in the Gulf of Mexico and west of 87 degrees and 30 minutes West longitude (essentially the Florida-Alabama boundary).
  4
 Table of Contents
  Currently, for leases entered into after November 2000, the BOE assigns a lease a specific volume of royalty suspension based on how the suspension amount would affect the economics of the lease’s development.   Any such royalty suspension applicable to a particular lease is generally set forth in the lease auction materials prepared by the BOE.  The amount of the suspension, if any, is not determined by water depth levels (as it had been in the past) but rather based upon the BOE’s view of the characteristics and economics of the project.  For example, a project deemed relatively secure and safe, such as those near existing transportation infrastructure, may receive no royalty relief while a similar project far away from any such infrastructure or in an area deemed more risky may receive significant royalty relief.   As a result, unlike the royalty relief associated with deep drilling in shallow waters, there is no formulaic or predictable means of determining in advance whether, and to what extent, royalty relief would be available for a potential deepwater project.
 
 Properties
 
 Productive Wells
 The following table sets forth the number of productive oil and natural gas wells in which the Fund owned an interest as of December 31, 2010.  Productive wells are producing wells and wells capable of production.  Gross wells are the total number of wells in which the Fund has an interest.  Net wells are the sum of the Fund’s fractional working interests owned in the gross wells.  All of the wells are located in the offshore waters of the Gulf of Mexico and are operated by third-party operators.
  Total Productive WellsGross


NetOil and natural gas


5



0.95Natural gas


1



0.11Total


6



1.06
 Acreage Data
 The following table sets forth the Fund’s interests in developed and undeveloped oil and gas acreage as of December 31, 2010.  Ownership interests generally take the form of working interests in oil and gas leases that have varying terms.  All of the wells are located in the offshore waters of the Gulf of Mexico and are operated by third-party operators.
 
 Developed Acres


Undeveloped AcresGross


Net


Gross


Net23,936


3,919


6,442


187
  5
 Table of Contents
 Information regarding the Fund’s current projects, all of which are located in the offshore waters of the Gulf of Mexico, is provided in the following table.
  Total Spent



TotalWorking



through



FundLease Block


Interest



December 31, 2010



Budget

StatusNon-producing PropertiesCarrera Project


2.50%


$
3,528


$
3,876

Well completed; awaiting tie-back to the production facility, which is expected in second quarter 2011.Raven Project well #2


6.25%


$
99


$
1,361

Drilling commenced December 2010; discovery March 2011.Producing PropertiesLiberty Project


2.5%


$
3,748


$
3,748

Well completed and production commenced July 2010.Raven Project well #1


6.25%


$
1,617


$
1,617

Well completed and production commenced September 2010.Eugene Island 346/347 well #1


10.0%


$
6,992


$
7,042

Production commenced in 2008.  A late-life recompletion is planned at an estimated cost of $50 thousand.West Cameron 593


43.3%


$
13,105


$
13,105

Production commenced in 2007.Eugene Island 354


33.0%


$
5,092


$
6,247

Production commenced in 2007. Recompletion efforts to access behind the pipe reserves are planned for 2012 at an estimated cost of $1.2 million.Whistler Project


11.0%


$
2,291


$
2,291

Production commenced January 2010.  Well ceased production on March 1, 2011.  See discussion below.Fully Depleted - 2010Eugene Island 346/347 well #2


10.0%


$
1,393



N/A

Fully depleted at December 31, 2010.Dry Holes2009Eagle Project


3.0%


$
1,321



N/A

Drilling commenced July 2009;

dry hole determination August 2009.South Timbalier 287


4.0%


$
4,373



N/A

Drilling commenced 2008; dry hole

determination January 2009.
  On March 1, 2011, the Fund was notified by the operator of the Whistler Project that the well had reached the end of its economic life, and that the production handling agreement entered into for the Whistler Project, had been terminated.  As a result, for the year ended December 31, 2010, the Fund recorded an impairment of oil and gas properties related to a revision to reserve estimates.
 
 In April 2010, the Deepwater Horizon, which was drilling a BP-operated project in the deepwater of the Gulf of Mexico, sank after an apparent blowout and fire.  As of the date of this filing, the well has been permanently capped and environmental remediation efforts are ongoing. Neither the Fund nor any operators of the Fund’s projects owns an interest in the affected field.  As a result of the explosion and resultant oil spill, the U.S. government placed a six-month moratorium on deepwater drilling operations in the Gulf of Mexico, which was lifted effective October 12, 2010.  The U.S. government has also implemented additional safety and certification requirements applicable to drilling activities in the Gulf of Mexico.  The extent to which these recent events may impact the Fund’s future results is uncertain.  The Fund cannot predict how federal and state authorities will further respond to the incident or whether additional changes in laws and regulations governing oil and gas operations in the Gulf of Mexico will result.  Such changes, if any, may impact the way the Fund conducts business and may increase the Fund’s cost of doing business.
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 Table of Contents
  In October 2009, the Fund purchased a 2.5% working interest in two undeveloped wells, the Liberty Project and the Carrera Project, with proved reserves for a total purchase price of $4.9 million, which approximated fair value at the acquisition date.
 
 Marketing/Customers
 
 During 2010, the Fund had engaged a third-party marketer to sell the Fund’s proportionate share of oil and natural gas to the public market.  The Fund did not contract to sell oil and natural gas to customers and therefore, had no customers or any one or few major customers upon which it depends.  Effective December 2010, the Fund sells its oil and gas through an agent, Energy Upgrade, Inc.
 
 The Fund’s current projects are near existing transportation infrastructure and pipelines.  The Manager believes that it is likely that oil and natural gas from the Fund’s future projects will have access to pipeline transportation and can be marketed through its agent.
 
 Natural gas is sold in the spot market at prevailing prices, which fluctuate with demand as a result of related industry variables.  Oil is generally sold one month at a time at prevailing market prices.  Historically, the markets for, and prices of, oil and natural gas have been extremely volatile, and they are likely to continue to be volatile in the future. This volatility is caused by numerous factors and market conditions that the Fund cannot control or influence; therefore, it is impossible to predict the future price of oil and natural gas with any certainty.  Low commodity prices could have an adverse affect on the Fund’s future profitability.In the past, the Fund has entered, and in the future, may continue to enter, into transactions, or derivative contracts, that fix the future prices for portions of its oil or natural gas production.
 
 Seasonality
 
 Generally, the Fund's business operations are not subject to seasonal fluctuations in the demand for oil and natural gas that would result in more of the Fund's oil and natural gas being sold, or likely to be sold, during one or more particular months or seasons. Once a project is producing, the operator of the project extracts oil and natural gas reserves throughout the year. Once extracted, oil and natural gas can be sold at any time during the year.
 
 The Fund’s properties are located in the Gulf of Mexico; therefore, its operations and cash flows may be significantly impacted by hurricanes and other inclement weather.  Such events may also have a detrimental impact on third-party pipelines and processing facilities, upon which the Fund relies to transport and process the oil and natural gas it produces. The National Hurricane Center defines hurricane season in the Gulf of Mexico as June through November. The Fund did not experience any damage or shut-ins, or production stoppages, due to hurricane activity in 2010.
 
 Operator
 
 The projects in which the Fund has invested are operated and controlled by unaffiliated third-party entities acting as operators. The operators are responsible for drilling, administration and production activities for leases jointly owned by working interest owners and act on behalf of all working interest owners under the terms of the applicable operating agreement. In certain circumstances, operators will enter into agreements with independent third-party subcontractors and suppliers to provide the various services required for operating leases. Currently, the Fund's producing projects are operated by LLOG Exploration Offshore, Inc., McMoRan Oil & Gas LLC,Phoenix Exploration Company LP, Devon Energy Corporation and Helis Oil and Gas Company, LLC.
  Because the Fund does not operate any of the projects in which it has acquired an interest, shareholders not only bear the risk that the Manager will be able to select suitable projects, but also that, once selected, such projects will be managed prudently, efficiently and fairly by the operators.
  7
 Table of Contents
  Insurance
 
 The Manager has obtained what it believes to be adequate insurance for the funds that it manages.  The Manager has obtained hazard, property, general liability and other insurance in commercially reasonable amounts to cover its projects, as well as general liability, directors’ and officers’ liability and similar coverage for its business operations. However, there is no assurance that such insurance will be adequate to protect the Fund from material losses related to the projects.  Further, for the policy period August 2009 through July 2010, the Manager did not obtain coverage for named windstorm.  As a result of the losses underwriters incurred from claims arising from Hurricane Ike, a named windstorm in September 2008, the Manager determined that the premiums sought by underwriters for, and the deductibles applicable to, coverage for named windstorm made obtaining such coverage for such policy period prohibitively expensive.  For the policy period August 2010 through July 2011, the Fund, through its operator, obtained windstorm coverage for the Liberty and Carrera projects.  In addition, the Manager's past practice has been to obtain insurance as a package that is intended to cover most, if not all, of the funds under its management.  The Manager re-evaluates the insurance coverage on an annual basis.  While the Manager believes it has obtained adequate insurance in accordance with customary industry practices, the possibility exists, depending on the extent of the incident, that insurance coverage may not be sufficient to cover all losses.  In addition, depending on the extent, nature and payment of any claims to the Fund's affiliates, yearly insurance limits may be exhausted and become insufficient to cover a claim made by the Fund in a given year.
 
 Salvage Fund
  As to projects in which the Fund owns a working interest, the Fund deposits in a separate interest-bearing account, or salvage fund, cash to provide for the Fund’s proportionate share of the anticipated cost of dismantling production platforms and facilities, plugging and abandoning the wells, and removing the platforms, facilities and wells in respect of the projects after the end of their useful lives, in accordance with applicable federal and state laws and regulations.  The Fund has deposited $1.2 million from capital contributions into a salvage fund, which, along with interest earned on this account, the Fund currently estimates to be sufficient to meet the Fund’s potential requirements. If, at any time, the Manager determines the salvage fund will not be sufficient to cover the Fund’s proportionate share of expense, the Fund may transfer amounts from capital contributions or operating income to fund the deficit.  Payments to the salvage fund will reduce the amount of cash distributions that may be made to investors by the Fund.  Any portion of a salvage fund that remains after the Fund pays its share of the actual salvage cost will be distributed to the shareholders. There are no legal restrictions on the withdrawal or use of the salvage fund.
 
 Competition
 
 Strong competition exists in the acquisition of oil and natural gas leases and in all sectors of the oil and natural gas exploration and production industry. Although the Fund does not compete for lease acquisitions from the BOE, it does compete with other companies for the acquisition of percentage ownership interests in oil and natural gas working interests in the secondary market.
 
 In many instances, the Fund competes for projects with large independent oil and natural gas producers who generally have significantly greater access to capital resources, have a larger staff, and more experience in oil and natural gas exploration and production than the Fund. As a result, these larger companies are in a position that they could outbid the Fund for a project. However, because these companies are larger and have significant resources, they tend to focus more on projects that are larger, have greater reserve potential, and cost significantly more to explore and develop.  The focus of these companies on larger projects does not necessarily mean that they will not investigate and/or acquire projects for which the Fund typically competes.  The Manager is often able to win project participations ahead of such competitors for the following reasons: (i) Ridgewood Energy has an investment process that is not subject to the more layered decision-making processes that typically exist within larger oil and gas companies; such process enables Ridgewood Energy to assimilate financial, seismic and operational data in relation to a prospective project and efficiently assess the terms on which the project is being offered, which the Fund believes puts Ridgewood Energy in a position to reach an investment decision in advance of most large oil and gas companies, (ii)  Ridgewood Energy is an active exploration and production participant in the Gulf of Mexico, and as a result, the management team is in regular contact with operators and is able to contribute perspectives both from a geological and operational viewpoint, and (iii) Ridgewood Energy is typically not viewed as a competitor by the syndicating operator, as Ridgewood Energy does not participate in lease block sales but principally invests in drill-ready syndicated projects.
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  Employees
 
 The Fund has no employees as the Manager operates and manages the Fund.
 
 Offices
 
 The principal executive office of each of the Fund and the Manager is located at 14 Philips Parkway, Montvale, NJ 07645, and their phone number is 800-942-5550. The Manager leases additional office space at 11700 Old Katy Road, Houston, TX 77079.  In addition, the Manager maintains leases for other offices that are used for administrative purposes for the Fund and other funds managed by the Manager.
 
 Regulation
 
 Oil and natural gas exploration, development and production activities are subject to extensive federal and state laws and regulations. Regulations governing exploration and development activities require, among other things, the Fund’s operators to obtain permits to drill projects and to meet bonding, insurance and environmental requirements in order to drill, own or operate projects. In addition, the location of projects, the method of drilling and casing projects, the restoration of properties upon which projects are drilled and the plugging and abandoning of projects are also subject to regulations.
 
 The Fund owns projects that are located in the offshore waters of the Gulf of Mexico on the OCS. The Fund’s operations and activities are therefore governed by the OCSLA and certain other laws and regulations. The Fund  also owns interests in properties located in state waters of the Gulf of Mexico, for which such states regulate drilling and operating activities by requiring, among other things, drilling permits and bonds and reports concerning operations. The laws of such states also govern a number of environmental and conservation matters, including the handling and disposing of waste materials, unitization and pooling of natural gas and oil properties, and the levels of production from natural gas and oil wells.
 
 Outer Continental Shelf Lands Act
 
 Under the OCSLA, the United States federal government has jurisdiction over oil and natural gas development on the OCS. As a result, the United States Secretary of the Interior is empowered to sell exploration, development and production leases of a defined submerged area of the OCS, or a block, through a competitive bidding process. Such activity is conducted by the BOE, an agency of the United States Department of Interior. The BOE administers federal offshore leases pursuant to regulations promulgated under the OCSLA. Lessees must obtain BOE approval for exploration, development and production plans prior to the commencement of offshore operations. In addition, approvals and permits are required from other agencies such as the U.S. Coast Guard, the Army Corps of Engineers and the Environmental Protection Agency.  The Fund is not involved in the process of obtaining any such approvals or permits. Offshore operations are subject to numerous regulatory requirements, including stringent engineering and construction specifications related to offshore production facilities and pipelines and safety-related regulations concerning the design and operating procedures of these facilities and pipelines. BOE regulations also restrict the flaring or venting of production and proposed regulations would prohibit the flaring of liquid hydrocarbons and oil without prior authorization.
 
 The BOE has also imposed regulations governing the plugging and abandonment of wells located offshore and the installation and removal of all production facilities. Under certain circumstances, the BOE may require operations on federal leases to be suspended or terminated. Any such suspension or termination could adversely affect the Fund’s operations and interests.
 
 The BOE conducts auctions for lease blocks of submerged areas offshore. As part of the leasing activity and as required by the OCSLA, the leases auctioned include specified lease terms such as the duration of the lease, the amount of royalty to be paid, lease cancellation and suspension, and, to a limited degree, the planned activities of exploration and production to be conducted by the lessee. In addition, the OCSLA grants the Secretary of the Interior continuing oversight and approval authority over exploration plans throughout the term of the lease.
 
 Sales and Transportation of Oil and Natural Gas
 
 The Fund sells its proportionate share of oil and natural gas to the market through an agent or a joint operating agreement and receives market prices from such sales. These sales are not currently subject to regulation by any federal or state agency. However, in order for the Fund to make such sales, it is dependent upon unaffiliated pipeline companies whose rates, terms and conditions of transport are subject to regulation by the Federal Energy Regulatory Commission ("FERC"). The rates, terms and conditions are regulated by FERC pursuant to a variety of statutes, including the OCSLA, the Natural Gas Policy Act of 1978 and the Energy Policy Act of 1992. Generally, depending on certain factors, pipelines can charge rates that are either market-based or cost-of-service. In some circumstances, rates can be agreed upon pursuant to settlement. Thus, the rates that pipelines charge the Fund, although regulated, are beyond the Fund’s control. Nevertheless, such rates would apply uniformly to all transporters on that pipeline and, as a result, management does not anticipate that the impact to the Fund of any changes in such rates, terms or conditions would be materially different than the impact upon other oil or natural gas producers and marketers.
  9
 Table of Contents
  Environmental Matters and Regulation
 
 The Fund’s operations are subject to pervasive environmental laws and regulations governing the discharge of materials into the air and water and the protection of aquatic species and habitats. However, although it shares the liability along with its other working interest owners for any environmental damage, most of the activities to which these environmental laws and regulations apply are conducted by the operator on the Fund’s behalf. Nevertheless, environmental laws and regulations to which its operations are subject may require the Fund, or the operator, to acquire permits to commence drilling operations, restrict or prohibit the release of certain materials or substances into the environment, impose the installation of certain environmental control devices, require certain remedial measures to prevent pollution and other discharges such as the plugging of abandoned projects and, finally, impose in some instances severe penalties, fines and liabilities for the environmental damage that may be caused by the Fund’s projects.
 
 Some of the environmental laws that apply to oil and natural gas exploration and production are:
 
 The Oil Pollution Act. The Oil Pollution Act of 1990, as amended (the “OPA”), amends Section 311 of the Federal Water Pollution Control Act of 1972 (the “Clean Water Act”) and was enacted in response to the numerous tanker spills, including the Exxon Valdez spill, that occurred in the 1980s. Among other things, the OPA clarifies the federal response authority to, and increases penalties for, such spills. The OPA establishes a new liability regime for oil pollution incidents in the aquatic environment. Essentially, the OPA provides that a responsible party for a vessel or facility from which oil is discharged or that poses a substantial threat of a discharge could be liable for certain specified damages resulting from a discharge of oil, including clean-up and remediation, loss of subsistence use of natural resources, real or personal property damages, as well as certain public and private damages. A responsible party includes a lessee of an offshore facility.
 
 The OPA also requires a responsible party to submit proof of its financial responsibility to cover environmental cleanup and restoration costs that could be incurred in connection with an oil spill. Under the OPA, parties responsible for offshore facilities must provide financial assurance of at least $35 million to address oil spills and associated damages. In certain limited circumstances, that amount may be increased to $150 million. As indicated earlier, the Fund has not been required to make any such showing to the BOE, as the operators are responsible for such compliance. However, notwithstanding the operators’ responsibility for compliance, in the event of an oil spill, the Fund, along with the operators and other working interest owners, could be liable under the OPA for the resulting environmental damage.
 
 Clean Water Act. Generally, the Clean Water Act imposes liability for the unauthorized discharge of pollutants, including petroleum products, into the surface and coastal U.S. waters, except in strict conformance with discharge permits issued by the federal, or state, if applicable, agency. Regulations governing water discharges also impose other requirements, such as the obligation to prepare spill response plans. The Fund’s operators are responsible for compliance with the Clean Water Act, although the Fund may be liable for any failure of the operator to do so.
 
 Federal Clean Air Act. The Federal Clean Air Act of 1970, as amended (the “Clean Air Act”), restricts the emission of certain air pollutants. Prior to constructing new facilities, permits may be required before work can commence and existing facilities may be required to incur additional capital costs to add equipment to ensure and maintain compliance.  As a result, the Fund’s operations may be required to incur additional costs to comply with the Clean Air Act.
 
 Other Environmental Laws. In addition to the above, the Fund’s operations may be subject to the Resource Conservation and Recovery Act of 1976, as amended, which regulates the generation, transportation, treatment, storage, disposal and cleanup of certain hazardous wastes, as well as the Comprehensive Environmental Response, Compensation and Liability Act, which imposes joint and several liability without regard to fault or legality of conduct on classes of persons who are considered responsible for the release of a hazardous substance into the environment.
  10
 Table of Contents
  The above represents a brief outline of the significant environmental laws that may apply to the Fund’s operations. The Fund believes that its operators are in compliance with each of these environmental laws and the regulations promulgated thereunder.  The Fund does not believe that the costs of compliance with applicable environmental laws, including federal, state and local laws, will have a material adverse impact on its financial condition and/or operations.
 
 ITEM 1A.  RISK FACTORS
 
 Not required.
 
 ITEM 1B.  UNRESOLVED STAFF COMMENTS
 
 Not applicable.
 
 ITEM 2.  PROPERTIES
 
 The information regarding the Fund’s properties that is contained in Item 1. “Business” of this Annual Report under the headings “Project Information” and “Properties,” is incorporated herein by reference.
 
 Drilling Activity
 The following table sets forth the Fund’s drilling activity for the years ended December 31, 2010 and 2009.  Gross wells are the total number of wells in which the Fund has an interest.  Net wells are the sum of the Fund’s fractional working interests owned in the gross wells.  All of the wells are located in the offshore waters of the Gulf of Mexico.  During the years ended December 31, 2010 and 2009, the Fund had no drilling activity for developmental wells.  See Item 1.“Business” of this Annual Report under the heading “Properties” for more information about wells in-progress at December 31, 2010.
  2010


2009Gross


Net


Gross


NetExploratory wells:Productive


2



0.17



-



-Nonproductive


-



-



2



0.07In-progress


1



0.06



2



0.17Exploratory well total


3



0.23



4



0.24
  Unaudited Oil and Gas Reserve Quantities
 The preparation of the Fund’s oil and gas reserve estimates are completed in accordance with the Fund’s internal control procedures over reserve estimation.  The Fund’s management controls over proved reserve estimation include: 1) verification of input data that is provided to an independent petroleum engineering firm 2) engagement of well-qualified and independent reservoir engineers for preparation of reserve reports annually in accordance with SEC reserve estimation guidelines and 3) a review of the reserve estimates by the Manager.
 
 The primary technical person in charge of overseeing the Fund’s reserves estimates has a B.S. degree in Petroleum Engineering and is a member of the Society of Petroleum Engineers, the Association of American Drilling Engineers and the American Petroleum Institute.  With over twenty years of industry experience, he is currently responsible for reserve reporting, engineering and economic evaluation of exploration and development opportunities, and the oversight of drilling and production operations.
 
 The Fund’s reserve estimates at December 31, 2010 and 2009 were prepared by Ryder Scott Company, L.P., (“Ryder Scott”) an independent petroleum engineering firm.  The information regarding the qualifications of the petroleum engineer is included within the report from Ryder Scott, which is included as Exhibit 99 of this Annual Report, and is incorporated herein by reference.
 
 Proved oil and gas reserves are estimated quantities of oil and natural gas, which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.  Proved developed oil and gas reserves are those reserves expected to be recovered through existing wells with existing equipment and operating methods.  The information regarding the Fund’s proved reserves, which is contained in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report under the heading “Critical Accounting Estimates – Proved Reserves”, is incorporated herein by reference.  The information regarding the Fund’s unaudited net quantities of proved developed and undeveloped reserves, which is contained in Table III in the “Supplementary Financial Information – Information about Oil and Gas Producing Activities – Unaudited” included in Item 15.  “Exhibits, Financial Statement Schedules” of this Annual Report, is incorporated herein by reference.
  11
 Table of Contents
  Proved Undeveloped Reserves.At December 31, 2010, the Fund had approximately 4 thousand barrels and 561 thousand mcf of proved undeveloped oil and natural gas reserves, respectively. These proved undeveloped reserves are related to the Raven Project.  The Fund will evaluate the development alternatives for the Raven Project’s proved undeveloped reserves upon the depletion of its current productive well, which is currently expected in late-2013.  At December 31, 2009, the Fund had approximately 57 thousand barrels and 547 thousand mcf of proved undeveloped oil and natural gas reserves, which were attributable to the Whistler Project and the Liberty and Carrera Project acquisitions in October 2009.  These undeveloped reserves were developed during 2010.  The Whistler Project commenced production in January 2010, the Liberty Project commenced production in July 2010 and the Carrera Project is awaiting tie-back to the production facility, which is expected in second quarter 2011.
 
 Production and Prices
 The information regarding the Fund’s production of oil and natural gas, and certain price and cost information for the years ended December 31, 2010 and 2009 that is contained in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report under the headings “Results of Operations – Oil and Gas Revenue” and “Results of Operations – Operating Expenses” is incorporated herein by reference.
 
 Delivery Commitments
 As of December 31, 2010, the Fund had no obligations or delivery commitments under any existing contracts.
 
 ITEM 3.  LEGAL PROCEEDINGS
  On August 16, 2006, the Manager of the Fund filed a lawsuit against the former independent registered public accounting firm for the Fund, Perelson Weiner, LLP, (“Perelson”) in New Jersey Superior Court, captioned Ridgewood Energy Corporation v. Perelson Weiner, LLP, Docket No. L-6092-06.  The suit alleged professional malpractice and breach of contract in connection with audit and accounting services performed for the Fund by Perelson. Thereafter, Perelson filed a counterclaim against the Manager on October 20, 2006, alleging breach of contract due to unpaid invoices in the amount of $326,554. During May 2010, a settlement was reached by the parties at no cost to the Fund.  Legal costs related to this claim were borne by the Manager.
  ITEM 4.  (REMOVED AND RESERVED)
 
 PART II
 
 ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
 There is currently no established public trading market for the Shares. As of the date of this filing, there were 1,532 shareholders of record of the Fund.
 
 Distributions are made in accordance with the provisions of the LLC Agreement.  At various times throughout the year, the Manager determines whether there is sufficient available cash, as defined in the LLC Agreement, for distribution to shareholders.  There is, however, no requirement to distribute available cash and as such, available cash is distributed to the extent and at such times as the Manager believes is advisable. During the years ended December 31, 2010 and 2009, the Fund paid distributions totaling $6.2 million and $1.8 million, respectively.
 
 ITEM 6.  SELECTED FINANCIAL DATA
 
 Not required.
 
 ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 Overview of the Fund’s Business
 The Fund was organized to primarily acquire interests in oil and gas properties located in the United States offshore waters of Texas, Louisiana and Alabama in the Gulf of Mexico. The Fund’s primary investment objective is to generate cash flow for distribution to its shareholders by generating returns across a portfolio of exploratory or development shallow water or deepwater oil and natural gas projects.  However, the Fund is not required to make distributions to shareholders except as provided in the LLC Agreement.
  12
 Table of Contents
  The Manager performs certain duties on the Fund’s behalf including the evaluation of potential projects for investment and ongoing management, administrative and advisory services associated with these projects. The Fund does not currently, nor is there any plan to, operate any project in which the Fund participates. The Manager enters into operating agreements with third-party operators for the management of all exploration, development and producing operations, as appropriate.See Item 1. “Business” of this Annual Report under the headings “Project Information” and “Properties” for more information regarding the projects of the Fund.
 
 Revenues are subject to market pricing for oil and natural gas, which has been volatile, and is likely to continue to be volatile in the future. This volatility is caused by numerous factors and market conditions that the Fund cannot control or influence. Therefore, it is impossible to predict the future price of oil and natural gas with any certainty. Low commodity prices could have an adverse affect on the Fund’s future profitability.
 
 Critical Accounting Estimates
 The discussion and analysis of the Fund’s financial condition and results of operations are based upon the Fund’s financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).  In preparing these financial statements, the Fund is required to make certain estimates, judgments and assumptions. These estimates, judgments and assumptions affect the reported amounts of the Fund’s assets and liabilities, including the disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of its revenues and expenses during the periods presented.  The Fund evaluates these estimates and assumptions on an ongoing basis. The Fund bases its estimates and assumptions on historical experience and on various other factors that the Fund believes to be reasonable at the time the estimates and assumptions are made. However, future events and actual results may differ from these estimates and assumptions and such differences may have a material impact on the results of operations, financial position or cash flows.  See Note 2 of Notes to Financial Statements – “Summary of Significant Accounting Policies” contained in Item 8. “Financial Statements and Supplementary Data” contained in this Annual Report for a discussion of the Fund’s significant accounting policies.
 
 Accounting for Exploration, Development and Acquisition Costs
 Exploration and production activities are accounted for using the successful efforts method. Costs of acquiring unproved and proved oil and natural gas leasehold acreage, including lease bonuses, brokers’ fees and other related costs are capitalized. Annual lease rentals, exploration expenses and dry-hole costs are expensed as incurred. Costs of drilling and equipping productive wells and related production facilities are capitalized.
 
 The costs of exploratory and developmental wells are capitalized pending determination of whether proved reserves have been found.  Drilling costs remain capitalized after drilling is completed if (1) the well has found a sufficient quantity of reserves to justify completion as a producing well and (2) sufficient progress is being made in assessing the reserves and the economic and operating viability of the project. If either of those criteria is not met, or if there is substantial doubt about the economic or operational viability of the project, the capitalized well costs are expensed as dry-hole costs. Indicators of sufficient progress in assessing reserves and the economic and operating viability of a project include: commitment of project personnel; active negotiations for sales contracts with customers; negotiations with governments, operators and contractors; and firm plans for additional drilling and other factors.
 
 Unproved Property
 Unproved property is comprised of capital costs incurred for undeveloped acreage, wells and production facilities in progress and wells pending determination. These costs are excluded from the depletion base until the outcome of the project has been determined, or generally until it is known whether proved reserves will or will not be assigned to the property.  The Fund assesses all items in its unproved property balance on an ongoing basis for possible impairment or reduction in value.
 
 Proved Reserves
 Annually, the Fund engages an independent petroleum engineer, Ryder Scott, to perform a comprehensive study of the Fund’s proved properties to determine the quantities of reserves and the period over which such reserves will be recoverable.The Fund’s estimates of proved reserves are based on the quantities of oil and natural gas that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under existing economic and operating conditions. However, there are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting future revenues, rates of production and timing of development expenditures, including many factors beyond the Fund’s control. The estimation process is very complex and relies on assumptions and subjective interpretations of available geologic, geophysical, engineering and production data and the accuracy of reserve estimates is a function of the quality and quantity of available data, engineering and geological interpretation, and judgment. In addition, as a result of volatility and changing market conditions, commodity prices and future development costs will change from period to period, causing estimates of proved reserves and future net revenues to change. Estimates of proved reserves are key components of the Fund’s most significant financial estimates involving its rate for recording depreciation, depletion and amortization.
  13
 Table of Contents
  Asset Retirement Obligations
 For oil and gas properties, there are obligations to perform removal and remediation activities when the properties are retired.  When a project reaches drilling depth and is determined to be either proved or dry, a liability is recognized for the present value of asset retirement obligations once reasonably estimable.  The Fund capitalizes the associated asset retirement costs as part of the carrying amount of its proved properties. Plug and abandonment costs associated with unsuccessful projects are expensed as dry-hole costs.
 
 Impairment of Long-Lived Assets
 The Fund reviews the value of its oil and gas properties whenever management determines that events and circumstances indicate that the recorded carrying value of properties may not be recoverable.  Impairments of producing properties are determined by comparing future net undiscounted cash flows to the net book value at the end of each period.  If the net book value exceeds the future net undiscounted cash flows, the carrying value of the property is written down to “fair value,” which is determined using net discounted future cash flows from the producing property.  Different pricing assumptions, reserve estimates or discount rates could result in a different calculated impairment.  The Fund provides for impairments on unproved properties when it determines that the property will not be developed or a permanent impairment in value has occurred.  Given the volatility of oil and natural gas prices, it is reasonably possible that the Fund’s estimate of discounted future net cash flows from proved oil and natural gas reserves could change in the near term.  If oil and natural gas prices decline significantly, even if only for a short period of time, it is possible that write-downs of oil and gas properties could occur.
 
 Results of Operations
 
 The following table summarizes the Fund’s results of operations for the years ended December 31, 2010 and 2009, and should be read in conjunction with the Fund’s financial statements and the notes thereto included within Item 8. “Financial Statements and Supplementary Data” in this Annual Report.
  Year ended December 31,2010


2009(in thousands)RevenueOil and gas revenue

$
9,356


$
6,091ExpensesDepletion and amortization


6,215



6,870Dry-hole costs


6



1,601Impairment of oil and gas properties


1,135



2,045Management fees to affiliate


1,661



1,685Operating expenses


1,386



1,282General and administrative expenses


388



472Total expenses


10,791



13,955Loss from operations


(1,435
)


(7,864
)Other incomeInterest income


34



51Derivative instrument income


90



-Total other income


124



51Net loss

$
(1,311
)

$
(7,813
)
  Overview.The Fund’s revenue, depletion and amortization, and lease operating expense were affected by the timing of the onset of production of the Fund’s wells and by the impact of temporary shut-ins.  During the year ended December 31, 2010, the Fund had seven wells that produced for a total of 1,940 days, compared to four wells that produced for a total of 875 days during the year ended December 31, 2009.  The increase in total production days resulted from the onset of production for the Raven, Liberty and Whistler projects, which commenced in September 2010, July 2010 and January 2010, respectively, and a reduction in the number of non-productive days related to shut-ins and maintenance activities.  During the year ended December 31, 2010, the Fund's wells' production rate averaged 713 mcfe/producing day, compared to 1,112 mcfe/producing day during the year ended December 31, 2009.  The decrease was related to natural declines in well production, coupled with the composite of the Fund’s wells, which have varying amounts of working interest ownership. In March 2011, the Fund was notified that the Whistler Project had reached the end of its economic life.  See Note 10 of Notes to Financial Statements – “Subsequent Events” in Item 8. “Financial Statements and Supplementary Data” contained in this Annual Report for additional information.
  14
 Table of Contents
 
 Oil and Gas Revenue.Oil and gas revenue for the year ended December 31, 2010 was $9.4 million, a $3.3 million increase from the year ended December 31, 2009.  The increase is attributable to increased sales volume totaling $2.5 million coupled with the impact of increased average prices totaling $0.9 million.
 
 Oil sales volumes were 62 thousand barrels and 51 thousand barrels for the years ended December 31, 2010 and 2009, respectively.  The Fund’s oil prices averaged $78 per barrel during the year ended December 31, 2010 compared to $64 per barrel during the year ended December 31, 2009.
 
 Gas sales volumes were 0.9 million mcf and 0.6 million mcf for the years ended December 31, 2010 and 2009, respectively.  The Fund’s gas prices averaged $4.22 per mcf during the year ended December 31, 2010 compared to $3.94 per mcf during the year ended December 31, 2009.
 
 The increases in oil and gas volumes were primarily the result of the onset of production of the Raven, Liberty and Whistler projects.These increases were partially offset by normal declines in production for other wells.   See “Overview” above for additional information.
 
 Depletion and Amortization.  Depletion and amortization for the year ended December 31, 2010 was $6.2 million, a decrease of $0.7 million from the year ended December 31, 2009.The decrease resulted from a decrease in average depletion rates totaling $3.6 million, partially offset by an increase in production volumes totaling $2.9 million.  The decrease in depletion rates was primarily the result of the composite of productive wells coupled with revisions to reserve estimates.
 
 Dry-hole Costs. Dry-hole costs are those costs incurred to drill and develop a well that is ultimately found to be incapable of producing either oil or natural gas in sufficient quantities to justify completion of the well.   At times, the Fund receives credits on certain wells from their respective operators upon review and audit of the wells’ costs.  Dry-hole costs, inclusive of such credits, are detailed in the following table.
  Year ended December 31,Lease Block

2010


2009(in thousands)South Timbalier 287

$
99


$
416Eagle Project


(66
)


1,388Other wells


(27
)


(203
)$
6


$
1,601
 Impairment of Oil and Gas  Properties.  During the year ended December 31, 2010, the Fund recorded impairments of oil and gas properties totaling $1.1 million, which were attributable to revisions in reserve estimates related to Eugene Island 346/347 well #1 and the Whistler Project.  During the year ended December 31, 2009, the Fund recorded impairments of oil and gas properties totaling $2.0 million, which were attributable to revisions in reserve estimates and lower oil and gas commodity prices related to the Whistler Project and West Cameron 593, respectively.
 
 Management Fees to Affiliate.Management fees for each of the years ended December 31, 2010 and 2009 were $1.7 million.  An annual management fee, totaling 2.5% of total capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund, is paid monthly to the Manager.
 
 Operating Expenses.  Operating expenses represent costs specifically identifiable or allocable to the Fund's wells, as detailed in the following table.
 
 15
 Table of Contents
  Year ended December 31,2010


2009(in thousands)Lease operating expense

$
1,280


$
1,069Geological costs


103



49Accretion expense


41



31Workover costs


(38
)


133$
1,386


$
1,282
 Lease operating expense relates to the Fund’s producing properties during each period as outlined above in “Overview”.  The average production cost was $0.93 per mcfe during the year ended December 31, 2010 compared to $1.10 per mcfe during the year ended December 31, 2009.  Geological costs represent costs incurred to obtain seismic data, surveys, and lease rentals primarily for the Raven Project.  Accretion expense is related to the asset retirement obligations established for the Fund’s proved properties. Workover costs represent costs to restore or stimulate production of existing reserves of a proved property.  For the years ended December 31, 2010 and 2009, workover costs and credits were related to the West Cameron 593 well, which incurred hurricane related expenses to repair its processing facility.
 
 General and Administrative Expenses.General and administrative expenses represent costs specifically identifiable or allocable to the Fund, as detailed in the following table.
  Year ended December 31,2010


2009(in thousands)Insurance expense

$
227


$
258Accounting fees


153



192Trust fees and other


8



22$
388


$
472
 Insurance expense represents premiums related to producing well and control of well insurance, which varies depending upon the number of wells producing or drilling and directors’ and officers’ liability insurance.  Accounting fees represent audit and tax preparation fees, quarterly reviews and filing fees incurred by the Fund.  Trust fees represent bank fees associated with the management of the Fund’s cash accounts.
 
 Interest Income.Interest income is comprised of interest earned on money market accounts and investments in U.S. Treasury securities.  Interest income for the year ended December 31, 2010 was $34 thousand, a  $17 thousand decrease from the year ended December 31, 2009.   The decrease was the result of a reduction in average outstanding balances earning interest, due to ongoing capital expenditures for oil and gas properties, coupled with lower interest rates earned.
 
 Derivative Instrument Income.In January 2010, the Fund entered into a derivative contract for put options relating to the pricing of gas for a portion of its anticipated production, which expired in October 2010.  During the year ended December 31, 2010, realized gains related to the derivative contract were $90 thousand.  There was no derivative activity during 2009.
 
 Capital Resources and Liquidity
 
 Operating Cash Flows
 Cash flows provided by operating activities for the year ended December 31, 2010 were $6.0 million, primarily related to revenue received of $9.2 million, partially offset by management fees of $1.7 million, operating expenses paid of $1.2 million and general and administrative expenses of $0.4 million.
 
 Cash flows provided by operating activities for the year ended December 31, 2009 were $1.9 million, primarily related to revenue received of $5.4 million, interest income received of $0.1 million and favorable working capital of $0.2 million, partially offset by management fees of $1.7 million, operating expenses paid of $1.1 million, payments of workover costs of $0.6 million and general and administrative expenses of $0.5 million.
  16
 Table of Contents
  Investing Cash Flows
 Cash flows used in investing activities for the year ended December 31, 2010 were $2.8 million, primarily related to investments in U.S. Treasury securities of $4.0 million and capital expenditures for oil and gas properties of $2.7 million, inclusive of advances, partially offset by proceeds received from the maturity of U.S. Treasury securities totaling $4.0 million.
 
 Cash flows used in investing activities for the year ended December 31, 2009 were $10.4 million, primarily related to capital expenditures for oil and gas properties of $10.2 million, investments in U.S. Treasury securities of $7.0 million and investments in the salvage fund totaling $0.2 million, partially offset by proceeds from the maturity of U.S. Treasury securities totaling $7.0 million.
 
 Financing Cash Flows
 Cash flows used in financing activities for the year ended December 31, 2010 were $6.2 million related to manager and shareholder distributions.
 
 Cash flows used in financing activities for the year ended December 31, 2009 were $1.8 million related to manager and shareholder distributions.
 
 Estimated Capital Expenditures
 
 The Fund has entered into multiple agreements for the acquisition, drilling and development of its investment properties.  The estimated capital expenditures associated with these agreements can vary depending on the stage of development on a property-by-property basis.  As of December 31, 2010, the Fund had committed to spend an additional $2.8 million related to its investment properties, of which $1.6 million is expected to be spent during the next twelve months.
 
 When the Manager makes a decision to participate in an exploratory project, it assumes that the well will be successful and allocates enough capital to budget for the completion of that well and the additional development wells and infrastructure anticipated.  If an exploratory well is deemed a dry hole or if it is determined by the Manager to be un-economical, the capital allocated to the completion of that well and to the development of additional wells is then reallocated to a new project or used to make additional investments.
 
 Capital expenditures for investment properties are funded with the capital raised by the Fund in its private placement offering, which is all the capital it will obtain.  The number of projects in which the Fund can invest is limited, and each unsuccessful project the Fund experiences exhausts its capital and reduces its ability to generate revenue.
 
 Liquidity Needs
 
 The Fund’s primary short-term liquidity needs are to fund its operations, inclusive of management fees, and capital expenditures for its investment properties.  Operations are funded utilizing operating income, existing cash on-hand, short-term investments, if any, and income earned therefrom.
 
 The Manager is entitled to receive an annual management fee from the Fund regardless of the Fund’s profitability in that year. Generally, all or a portion of the management fee is paid from operating income and interest income.
 
 Distributions, if any, are funded from available cash from operations, as defined in the LLC Agreement, and the frequency and amount are within the Manager’s discretion.
 
 Off-Balance Sheet Arrangements
 
 The Fund had no off-balance sheet arrangements at December 31, 2010 and 2009 and does not anticipate the use of such arrangements in the future.
 
 Contractual Obligations
 
 The Fund enters into participation and joint operating agreements with operators.  On behalf of the Fund, an operator enters into various contractual commitments pertaining to exploration, development and production activities.  The Fund does not negotiate such contracts.  No contractual obligations exist at December 31, 2010 and 2009 other than those discussed in “Estimated Capital Expenditures” above.
  17
 Table of Contents
  Recent Accounting Pronouncements
  See Note 3 of Notes to Financial Statements – “Recent Accounting Standards” in Item 8. “Financial Statements and Supplementary Data” contained in this Annual Report for a discussion of recent accounting pronouncements.
 
 ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 Not required.
  ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  All financial statements meeting the requirements of Regulation S-X and the supplementary financial information required by Item 302 of Regulation S-K are included in the financial statements listed in Item 15. “Exhibits, Financial Statement Schedules” and filed as part of this report.
  ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  None.
 
 ITEM 9A.CONTROLS AND PROCEDURES
 
 Disclosure Controls and Procedures
 Under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer of the Fund, management of the Fund and the Manager carried out an evaluation of the effectiveness of the design and operation of the Fund’s disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of December 31, 2010.  Based upon the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Fund’s disclosure controls and procedures are effective as of the end of the period covered by this report.
 
 Management's Report on Internal Control over Financial Reporting
 Management of the Fund is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)).  The Fund’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
 
 Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
 Management of the Fund, including its Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Fund’s internal control over financial reporting as of December 31, 2010.  In making this assessment, management of the Fund used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO”) in Internal Control — Integrated Framework. Based on their assessment using those criteria, management of the Fund concluded that, as of December 31, 2010, the Fund’s internal control over financial reporting is effective.
 
 This Annual Report does not include an attestation report of the Fund’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Fund’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Fund to provide only management’s report in this Annual Report.
 
 Changes in Internal Control over Financial Reporting
 The Chief Executive Officer and Chief Financial Officer of the Fund have concluded that there have not been any changes in the Fund’s internal control over financial reporting during the quarter ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Fund’s internal control over financial reporting.
  18
 Table of Contents
  ITEM 9B.OTHER INFORMATION
 
 None.
  PART III
 
  ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  The Fund has engaged Ridgewood Energy as the Manager.  The Manager has very broad authority, including the authority to appoint the executive officers of the Fund.  Executive officers of Ridgewood Energy and the Fund and their ages at December 31, 2010 are as follows:
  Officer ofRidgewood EnergyName, Age and Position with Registrant

Corporation SinceRobert E. Swanson, 63Chief Executive Officer

1982Kenneth W. Lang, 56President and Chief Operating Officer

2009Kathleen P. McSherry, 45Executive Vice President andChief Financial Officer

2001Robert L. Gold, 52Executive Vice President

1987Daniel V. Gulino, 50Senior Vice President and General Counsel

2003
  The officers in the above table have also been officers of the Fund since March 21, 2005, the date of inception of the Fund, with the exception of Mr. Lang, who has been an officer of Ridgewood Energy and the Fund since June 2009.  The officers are employed by and paid exclusively by the Manager.  Set forth below is certain biographical information regarding the executive officers of Ridgewood Energy and the Fund:
 
 Robert E. Swanson has served as the Chairman, Chief Executive Officer, and controlling shareholder of Ridgewood Energy since its inception and is the Chairman of the Investment Committee.  Mr. Swanson is also the Chairman of Ridgewood Capital Management, LLC, and President of Ridgewood Securities Corporation, affiliates of Ridgewood Energy. Mr. Swanson is a member of the New York State and New Jersey State Bars, the Association of the Bar of the City of New York and the New York State Bar Association. He is a graduate of Amherst College and Fordham University Law School.
 
 Kenneth W. Langhas served as the President and Chief Operating Officer of Ridgewood Energy since June 2009 and is a member of the Investment Committee.  Prior to joining the Fund, Mr. Lang was with BP for twenty-four years, ultimately serving for his last two years with BP as Senior Vice President for BP’s Gulf of Mexico business and a member of the Board of Directors for BP America, Inc.  Prior to that, Mr. Lang was Vice President – Production for BP.  After twenty-four years of service to BP, Mr. Lang retired and devoted fifteen months of personal time to pursue and explore other interests.  Mr. Lang is a graduate of the University of Houston.
 
 Kathleen P. McSherry has served as the Executive Vice President and Chief Financial Officer of Ridgewood Energy since 2001 and is a member of the Investment Committee.  Ms. McSherry holds a Bachelor of Science degree in Accounting.
 
 Robert L. Gold has served as the Executive Vice President of Ridgewood Energy since 1987 and is a member of the Investment Committee.  Mr. Gold has also served as the President and Chief Executive Officer of Ridgewood Capital since its inception in 1998. Mr. Gold is a member of the New York State Bar. Mr. Gold is a graduate of Colgate University and New York University School of Law.
  19
 Table of Contents
  Daniel V. Gulino is Senior Vice President of Legal Affairs for Ridgewood Energy and has served as counsel for Ridgewood Energy since 2003. Mr. Gulino also serves as Senior Vice President of Legal Affairs of Ridgewood Capital Management and Senior Vice President & General Counsel of Ridgewood Securities Corporation.  Mr. Gulino is a member of the New Jersey State and Pennsylvania State Bars.  Mr. Gulino is a graduate of Fairleigh Dickinson University and Rutgers School of Law.
 
 Board of Directors and Board Committees
 The Fund does not have its own board of directors or any board committees. The Fund relies upon the Manager to provide recommendations regarding dispositions and financial disclosure.  Officers of the Fund are not compensated by the Fund, and all compensation matters are addressed by the Manager, as described in Item 11. “Executive Compensation” of this Annual Report.  Because the Fund does not maintain a board of directors and because officers of the Fund are compensated by the Manager, the Manager believes that it is appropriate for the Fund to not have a nominating or compensation committee.
 
 Code of Ethics
 The Manager has adopted a code of ethics for all employees, including the Manager’s principal executive officer and principal financial and accounting officer. If any amendments are made to the code of ethics or the Manager grants any waiver, including any implicit waiver, from a provision of the code that applies to the Manager’s executive officers or principal financial and accounting officer, the Fund will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K.  Copies of the code of ethics are available, without charge, on the Manager’s website at www.ridgewoodenergy.com and in print upon written request to the business address of the Manager at 14 Philips Parkway, Montvale, New Jersey 07645, ATTN:  General Counsel.
 
 Section 16(a) Beneficial Ownership Reporting Compliance
 Section 16(a) of the Exchange Act, as amended, requires the Fund’s executive officers and directors, and persons who own more than 10% of a registered class of the Fund’s equity securities, to file reports of ownership and changes in ownership with the SEC. Based on a review of the copies of reports furnished or otherwise available to the Fund, the Fund believes that during the year ended December 31, 2010, all filing requirements applicable to its officers, directors and 10% beneficial owners were met.
 
 ITEM 11.        EXECUTIVE COMPENSATION
 
 The executive officers of the Fund do not receive compensation from the Fund. The Manager, or its affiliates, compensates the officers without additional payments by the Fund. See Item 13. “Certain Relationships and Related Transactions, and Director Independence” of this Annual Report for more information regarding Manager compensation and payments to affiliated entities.
 
 ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
 The following table sets forth information with respect to beneficial ownership of the Shares as of March 22, 2011 (no person owns more than 5% of the Shares) by:
 
 ·
each executive officer (there are no directors); and
 ·
all of the executive officers as a group.
 
 Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as indicated by footnote, and subject to applicable community property laws, the persons named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. Percentage of beneficial ownership is based on 933.06 shares outstanding at March 22, 2011. Other than as indicated below, no officer of the Manager or the Fund owns any of the Shares.
 
 Name of beneficial owner
Number

of shares
PercentRobert E. Swanson, Chief Executive Officer (1)
3.6667
*Executive officers as a group (1)
3.6667
*
  * Represents less than one percent.(1) Includes shares owned by Mr. Swanson’s family members and trusts.
  20
 Table of Contents
  ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
 The LLC Agreement provides that the Manager render management, administrative and advisory services.  For such services, the Manager is paid an annual management fee, payable monthly, of 2.5% of total capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund.  Management fees for each of the years ended December 31, 2010 and 2009 were $1.7 million.
 
 The Manager is entitled to receive a 15% interest in cash distributions made by the Fund.   Distributions paid to the Manager forthe years ended December 31, 2010 and 2009were $0.9 million and $0.3 million, respectively.
 
 At times, short-term payables and receivables, which do not bear interest, arise from transactions with affiliates in the ordinary course of business.
 
 None of the compensation paid to the Manager has been derived as a result of arm’s length negotiations.
 
 The Fund has working interest ownership in certain projects to acquire and develop oil and natural gas projects with other entities that are likewise managed by the Manager.
  Profits and losses are allocated in accordance with the LLC Agreement. In general, profits and losses in any year are allocated 85% to shareholders and 15% to the Manager. The primary exception to this treatment is that all items of expense, loss, deduction and credit attributable to the expenditure of shareholders’ capital contributions are allocated 99% to shareholders and 1% to the Manager.
  ITEM 14.       PRINCIPAL ACCOUNTING FEES AND SERVICES
 
 The following table presents fees for services rendered by Deloitte & Touche LLP for the years ended December 31, 2010 and 2009.
  Year ended December 31,2010


2009(in thousands)Audit fees (1)

$
120


$
130Audit-related fees (2)


-



3$
120


$
133
 
 (1)
Fees for audit of annual financial statements, reviews of the related quarterly financial statements, and reviews of documents filed with the SEC.(2)
Fees for consultations regarding the Fund’s disclosure controls and procedures in accordance with Section 906 of the Sarbanes-Oxley Act of 2002.
  21
 Table of Contents
  PART IV
 
 ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 
 (a) (1)     Financial Statements
 
 See “Index to Financial Statements” set forth on page F-1.
 
 (a) (2)     Financial Statement Schedules
 
 None.
 
 (a) (3)
 
 EXHIBITNUMBER
TITLE OF EXHIBIT

METHOD OF FILING3.1
Certificate of Formation of Ridgewood Energy P Fund, LLC dated March 21, 2005.

Incorporated by reference to the Fund's Form 10 filed on April 21, 2006.3.2
Limited Liability Company Agreement between Ridgewood Energy Corporation and Investors of Ridgewood Energy P Fund, LLC dated May 16, 2005.

Incorporated by reference to the Fund's Form 10 filed on April 21, 2006.14
Code of Ethics

Filed herewith.31.1
Certification of Robert E. Swanson, Chief Executive Officer, pursuant to Securities Exchange Act Rule 13a-14(a).

Filed herewith.31.2
Certification of Kathleen P. McSherry, Executive Vice President and Chief Financial Officer, pursuant to Securities Exchange Act Rule 13a-14(a).

Filed herewith.32
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Robert E. Swanson, Chief Executive Officer of the Fund and Kathleen P. McSherry, Executive Vice President and Chief Financial Officer of the Fund.

Filed herewith.99
Report of Ryder Scott Company. L.P.

Filed herewith.
  22
 Table of Contents
 SIGNATURES
 
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
  RIDGEWOOD ENERGY P FUND, LLCDate:  March 22, 2011
By:
/s/ ROBERT E. SWANSONRobert E. SwansonChief Executive Officer(Principal Executive Officer)
  
 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
 Signature
Capacity
DateMarch 22, 2011/s/ ROBERT E. SWANSON
Chief Executive Officer

(Principal Executive Officer)Robert E. Swanson/s/ KATHLEEN P. MCSHERRY
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
March 22, 2011Kathleen P. McSherryRIDGEWOOD ENERGY CORPORATIONBY:  /s/ ROBERT E. SWANSON
Chief Executive Officer of the Manager
March 22, 2011Robert E. Swanson
 
 23
 Table of Contents
  INDEX TO FINANCIAL STATEMENTS
PAGEReport of Independent Registered Public Accounting Firm
F-2Balance Sheets as of December 31, 2010 and 2009
F-3Statements of Operations for the years ended December 31, 2010 and 2009
F-4Statements of Changes in Members' Capital for the years ended December 31, 2010 and 2009
F-5Statements of Cash Flows for the years ended December 31, 2010 and 2009
F-6Notes to Financial Statements
F-7Supplementary Financial Information - Information about Oil and Gas Producing Activities - Unaudited
F-13
       F-1
 Table of Contents
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the Shareholders and Manager of Ridgewood Energy P Fund, LLC:
 
 We have audited the accompanying balance sheets of Ridgewood Energy P Fund, LLC (the “Fund”) as of December 31, 2010 and 2009, and the related statements of operations, changes in members’ capital, and cash flows for the years ended December 31, 2010 and 2009.  These financial statements are the responsibility of the Fund's management.  Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures, in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, such financial statements present fairly, in all material respects, the financial position of Ridgewood Energy P Fund, LLC as of December 31, 2010 and 2009, and the results of its operations and its cash flows for the years ended December 31, 2010 and 2009, in conformity with accounting principles generally accepted in the United States of America.
 
 /s/ Deloitte & Touche LLP
 
 Parsippany, New Jersey
 March 22, 2011
 
 F-2
 Table of Contents
  RIDGEWOOD ENERGY P FUND, LLC
 BALANCE SHEETS
 (in thousands, except share data)
  December 31,2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
4,441


$
7,436Production receivable


1,079



890Other current assets


83



188Total current assets


5,603



8,514Salvage fund


1,367



1,340Oil and gas properties:Advances to operators for working interests and expenditures


226



-Unproved properties


99



989Proved properties


38,747



35,775Less:  accumulated depletion and amortization


(25,975
)


(18,625
)Total oil and gas properties, net


13,097



18,139Total assets

$
20,067


$
27,993LIABILITIES AND MEMBERS' CAPITALCurrent liabilities:Due to operators

$
321


$
868Accrued expenses


121



140Total current liabilities


442



1,008Asset retirement obligations


1,310



1,172Total liabilities


1,752



2,180Commitments and contingencies (Note 9)Members' capital:Manager:Distributions


(3,667
)


(2,739
)Retained earnings


1,448



599Manager's total


(2,219
)


(2,140
)Shareholders:Capital contributions (1,335 shares authorized;933.06 issued and outstanding)


138,344



138,344Syndication costs


(15,898
)


(15,898
)Distributions


(20,785
)


(15,526
)Accumulated deficit


(81,127
)


(78,967
)Shareholders' total


20,534



27,953Total members' capital


18,315



25,813Total liabilities and members' capital

$
20,067


$
27,993
 The accompanying notes are an integral part of these financial statements.
  F-3
 Table of Contents
  RIDGEWOOD ENERGY P FUND, LLC
 STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 Year ended December 31,2010


2009RevenueOil and gas revenue

$
9,356


$
6,091ExpensesDepletion and amortization


6,215



6,870Dry-hole costs


6



1,601Impairment of oil and gas properties


1,135



2,045Management fees to affiliate (Note 7)


1,661



1,685Operating expenses


1,386



1,282General and administrative expenses


388



472Total expenses


10,791



13,955Loss from operations


(1,435
)


(7,864
)Other incomeInterest income


34



51Derivative instrument income


90



-Total other income


124



51Net loss

$
(1,311
)

$
(7,813
)Manager InterestNet income

$
849


$
308Shareholder InterestNet loss

$
(2,160
)

$
(8,121
)Net loss per share

$
(2,315
)

$
(8,704
)
  The accompanying notes are an integral part of these financial statements.
  F-4
 Table of Contents
  RIDGEWOOD ENERGY P FUND, LLC
 STATEMENTS OF CHANGES IN MEMBERS' CAPITAL
 (in thousands, except share data)
   # of Shares


Manager


Shareholders


TotalBalances, December 31, 2008


933.06


$
(2,173
)

$
37,636


$
35,463Distributions


-



(275
)


(1,562
)


(1,837
)Net income (loss)


-



308



(8,121
)


(7,813
)Balances, December 31, 2009


933.06



(2,140
)


27,953



25,813Distributions


-



(928
)


(5,259
)


(6,187
)Net income (loss)


-



849



(2,160
)


(1,311
)Balances, December 31, 2010


933.06


$
(2,219
)

$
20,534


$
18,315
 The accompanying notes are an integral part of these financial statements.
  F-5
 Table of Contents
  RIDGEWOOD ENERGY P FUND, LLC
 STATEMENTS OF CASH FLOWS
 (in thousands)
  Year ended December 31,2010


2009Cash flows from operating activitiesNet loss

$
(1,311
)

$
(7,813
)Adjustments to reconcile net loss to net cashprovided by operating activities:Depletion and amortization


6,215



6,870Dry-hole costs


6



1,601Impairment of oil and gas properties


1,135



2,045Accretion expense


41



31Interest earned on marketable securities


(4
)


(5
)Derivative instrument income


(90
)


-Derivative instrument settlements


150



-Changes in assets and liabilities:Increase in production receivable


(189
)


(667
)(Increase) decrease in other current assets


(69
)


91Increase (decrease) in due to operators


98



(332
)(Decrease) increase in accrued expenses


(19
)


62Net cash provided by operating activities


5,963



1,883Cash flows from investing activitiesPayments to operators for working interests and expenditures


(226
)


-Capital expenditures for oil and gas properties


(2,522
)


(10,196
)Proceeds from held-to-maturity investments


4,004



6,998Investments in held-to-maturity securities


(4,000
)


(6,993
)Investments in salvage fund


(27
)


(201
)Net cash used in investing activities


(2,771
)


(10,392
)Cash flows from financing activitiesDistributions


(6,187
)


(1,837
)Net cash used in financing activities


(6,187
)


(1,837
)Net decrease in cash and cash equivalents


(2,995
)


(10,346
)Cash and cash equivalents, beginning of year


7,436



17,782Cash and cash equivalents, end of year

$
4,441


$
7,436
  The accompanying notes are an integral part of these financial statements.
  F-6
 Table of Contents
 RIDGEWOOD ENERGY P FUND, LLC
 NOTES TO FINANCIAL STATEMENTS
 
 
 1.   Organization and Purpose
 
 The Ridgewood Energy P Fund, LLC (the "Fund”), a Delaware limited liability company, was formed on March 21, 2005 and operates pursuant to a limited liability company agreement (the “LLC Agreement") dated as of May 16, 2005 by and among Ridgewood Energy Corporation (the "Manager") and the shareholders of the Fund.  The Fund was organized to acquire interests in oil and gas properties located in the United States offshore waters of Texas, Louisiana and Alabama in the Gulf of Mexico.
  The Manager has direct and exclusive control over the management of the Fund’s operations.  With respect to project investments, the Manager locates potential projects, conducts due diligence and negotiates and completes the transactions in which the investments are made.  The Manager performs, or arranges for the performance of, the management, advisory and administrative services required for Fund operations.  Such services include, without limitation, the administration of shareholder accounts, shareholder relations and the preparation, review and dissemination of tax and other financial information.  In addition, the Manager provides office space, equipment and facilities and other services necessary for Fund operations.  The Manager also engages and manages the contractual relations with unaffiliated custodians, depositories, accountants, attorneys, broker-dealers, corporate fiduciaries, insurers, banks and others as required. See Notes 2, 7 and 9.
  2.   Summary of Significant Accounting Policies
 
 Use of Estimates
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period.  On an ongoing basis, the Manager reviews its estimates, including those related to property balances, determination of proved reserves, impairments and asset retirement obligations. Actual results may differ from those estimates.
 
 Cash and Cash Equivalents
 All highly liquid investments with maturities, when purchased, of three months or less, are considered cash and cash equivalents.  At times, deposits may be in excess of federally insured limits.  Federally insured limits of the Fund’s deposits are $250 thousand per insured financial institution.  At December 31, 2010, the Fund’s bank balances exceeded federally insured limits by $2.1 million, principally all of which was invested in money market accounts that invest solely in U.S. Treasury bills and notes.
 
 Investments in Marketable Securities
 At times, the Fund may invest in U.S. Treasury bills and notes.  These investments are considered short-term when their maturities are one year or less, and long-term when their maturities are greater than one year.  Held-to-maturity investments are those securities that the Fund has the ability and intent to hold until maturity, and are recorded at cost plus accrued income, adjusted for the amortization of premiums and discounts, which approximates fair value.  At December 31, 2010 and 2009, the Fund had no short-term, held-to-maturity investments.
 
 For all investments, interest income is accrued as earned and amortization of premium or discount, if any, is included in interest income.
 
 Salvage Fund
 The Fund deposits in a separate interest-bearing account, or salvage fund, money to provide for the dismantling and removal of production platforms and facilities and plugging and abandoning its wells at the end of their useful lives, in accordance with applicable federal and state laws and regulations.  At December 31, 2010, the Fund had investments in U.S. Treasury securities within its salvage fund that are classified as held-to-maturity investments, of $0.2 million, which matured in March 2011, and $1.0 million, which matures in February 2012. Interest earned on the account will become part of the salvage fund.  There are no restrictions on withdrawals from the salvage fund.
  F-7
 Table of Contents
  Oil and Gas Properties
 The Fund invests in oil and gas properties, which are operated by unaffiliated entities that are responsible for drilling, administering and producing activities pursuant to the terms of the applicable operating agreements with working interest owners.  The Fund’s portion of exploration, drilling, operating and capital equipment expenditures is billed by operators.
  The successful efforts method of accounting for oil and gas producing activities is followed.  Acquisition costs are capitalized when incurred.  Other oil and gas exploration costs, excluding the costs of drilling exploratory wells, are charged to expense as incurred.  The costs of drilling exploratory wells are capitalized pending the determination of whether the wells have discovered proved commercial reserves.  If proved commercial reserves have not been found, exploratory drilling costs are expensed as dry-hole costs.  Costs to develop proved reserves, including the costs of all development wells and related facilities and equipment used in the production of oil and gas, are capitalized.  Expenditures for ongoing repairs and maintenance of producing properties are expensed as incurred.
  Upon the sale or retirement of a proved property, the cost and related accumulated depletion and amortization will be eliminated from the property accounts, and the resultant gain or loss is recognized. Upon the sale or retirement of an unproved property, gain or loss on the sale is recognized.
  Capitalized acquisition costs of producing oil and gas properties are depleted by the units-of-production method.
  At December 31, 2010 and 2009, amounts recorded in due to operators totaling $74 thousand and $0.7 million, respectively, related to capital expenditures for oil and gas properties.
  Advances to Operators for Working Interests and Expenditures
 The Fund’s acquisition of a working interest in a well or a project requires it to make a payment to the seller for the Fund’s rights, title and interest.  The Fund may be required to advance its share of estimated cash expenditures for the succeeding month’s operation.  The Fund accounts for such payments as advances to operators for working interests and expenditures.  As drilling costs are incurred, the advances are reclassified to unproved or proved properties.
 
 Asset Retirement Obligations
 For oil and gas properties, there are obligations to perform removal and remediation activities when the properties are retired.  When a project reaches drilling depth and is determined to be either proved or dry, an asset retirement obligation is incurred.  Plug and abandonment costs associated with unsuccessful projects are expensed as dry-hole costs.  The following table presents changes in asset retirement obligations for the years ended December 31, 2010 and 2009.
  2010


2009(in thousands)Balance, beginning of year

$
1,172


$
957Liabilities incurred


81



184Accretion expense


41



31Revisions to previous estimates


16



-Balance, end of year

$
1,310


$
1,172
  As indicated above, the Fund maintains a salvage fund to provide for the funding of future asset retirement obligations.
 
 Syndication Costs
 Syndication costs are direct costs incurred by the Fund in connection with the offering of the Fund’s shares, including professional fees, selling expenses and administrative costs payable to the Manager, an affiliate of the Manager and unaffiliated broker-dealers, which are reflected on the Fund’s balance sheet as a reduction of shareholders’ capital.
 
 Revenue Recognition and Imbalances
 Oil and gas revenues are recognized when oil and gas is sold to a purchaser at a fixed or determinable price, when delivery has occurred and title has transferred, and if collectibility of the revenue is probable.The Fund uses the sales method of accounting for gas production imbalances.  The volumes of gas sold may differ from the volumes to which the Fund is entitled based on its interests in the properties.  These differences create imbalances that are recognized as a liability only when the properties’ estimated remaining reserves net to the Fund will not be sufficient to enable the underproduced owner to recoup its entitled share through production.  The Fund’s recorded liability, if any, would be reflected in other liabilities.  No receivables are recorded for those wells where the Fund has taken less than its share of production.
  F-8
 Table of Contents
  Derivative Instruments
 The Fund may periodically utilize derivative instruments to manage the price risk attributable to its oil and gas production.  Derivative instruments are carried on the balance sheet at fair value and recorded as either an asset or liability.  Changes in the fair value of the derivatives are recorded currently in earnings unless specific hedge accounting criteria are met.  At this time, the Fund has elected not to use hedge accounting for its derivatives and, accordingly, the derivatives are marked-to-market each quarter with fair value gains and losses recognized currently as derivative instrument income on the statement of operations.  The related cash flow impact of the derivative activities are reflected as cash flows from operating activities on the statement of cash flows.  See Note 4.  “Derivative Instruments,” for more information.
 
 Impairment of Long-Lived Assets
 The Fund reviews the value of its oil and gas properties whenever management determines that events and circumstances indicate that the recorded carrying value of properties may not be recoverable. Impairments of producing properties are determined by comparing future net undiscounted cash flows to the net book value at the time of the review.  If the net book value exceeds the future net undiscounted cash flows, the carrying value of the property is written down to fair value, which is determined using net discounted future cash flows from the producing property. The Fund provides for impairments on unproved properties when it determines that the property will not be developed or a permanent impairment in value has occurred.  The fair value determinations require considerable judgment and are sensitive to change.  Different pricing assumptions, reserve estimates or discount rates could result in a different calculated impairment. Given the volatility of oil and natural gas prices, it is reasonably possible that the Fund’s estimate of discounted future net cash flows from proved oil and natural gas reserves could change in the near term.  If oil and natural gas prices decline significantly, even if only for a short period of time, it is possible that write-downs of oil and gas properties could occur.
 
 During the year ended December 31, 2010, the Fund recorded impairments to oil and gas properties of $0.9 million and $0.2 million relating to Eugene Island 346/347 well #1 and the Whistler Project, respectively.  The impairments were the result of revisions to reserve estimates.  During the year ended December 31, 2009, the Fund recorded impairments to oil and gas properties of $1.1 million and $0.9 million for the Whistler project and West Cameron 593, respectively.  The impairments were the result of revisions to reserve estimates and lower oil and gas commodity prices. The fair value of the impaired wells was determined based on level 3 inputs, which include projected income from reserves utilizing forward price curves, net of anticipated costs, discounted.
 
 Depletion and Amortization
 Depletion and amortization of the cost of proved oil and gas properties are calculated using the units-of-production method.  Proved developed reserves are used as the base for depleting capitalized costs associated with successful exploratory well costs.  The sum of proved developed and proved undeveloped reserves is used as the base for depleting or amortizing leasehold acquisition costs, the costs to acquire proved properties and platform and pipeline costs.
  Income Taxes
 No provision is made for income taxes in the financial statements.  The Fund is a limited liability company, and as such, the Fund’s income or loss is passed through and included in the tax returns of the Fund’s shareholders.
 
 Income and Expense Allocation
 Profits and losses are allocated 85% to shareholders in proportion to their relative capital contributions and 15% to the Manager, except for interest income and certain expenses such as dry-hole costs, trust fees, depletion and amortization, which are allocated 99% to shareholders and 1% to the Manager.
 
 3.   Recent Accounting Standards
  In January 2010, the Financial Accounting Standards Board (“FASB”) issued guidance on improving disclosures about fair value measurements.  This guidance has new requirements for disclosures related to recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements in a rollforward reconciliation of Level 3 fair-value measurements. This guidance was effective beginning January 1, 2010.  The Level 3 reconciliation disclosures are effective for fiscal years beginning after December 15, 2010, which will be effective for the Fund December 31, 2011. The adoption of the guidance is not expected to have a material impact on the Fund’s financial statements.
  F-9
 Table of Contents
  4.   Derivative Instruments
  The Fund periodically enters into derivative contracts relating to its oil or gas production.  In January 2010, the Fund entered into an eight-month derivative contract for put options relating to the pricing of gas for a portion of its anticipated production.  The use of such derivative instruments limits the downside risk of adverse price movements.  Currently, the Fund has elected not to use hedge accounting for its derivatives and consequently, the derivatives are marked-to-market each quarter with fair value gains and losses recognized as derivative instrument income on the statement of operations.  The estimated fair value of these contracts is based upon closing exchange prices on the New York Mercantile Exchange (“NYMEX”).  See Note 8. “Fair Value Measurements.”  The Fund has exposure to credit risk to the extent the derivative instrument counterparty is unable to satisfy its settlement commitment.  The Fund actively monitors the creditworthiness of each counterparty and assesses the impact, if any, on its derivative positions.
  Derivative instruments are carried at their fair value on the balance sheet within “Other current assets” and are settled based upon reported prices on the NYMEX.  The Fund recognizes all unrealized and realized gains and losses related to these contracts on a mark-to-market basis in the statement of operations under the caption “Derivative instrument income.”  Settlements of derivative contracts are reflected in operating activities on the statement of cash flows.
  At December 31, 2010 and 2009, the Fund had no outstanding derivative contracts.  In January 2011, the Fund entered into two eight-month derivative contracts for put options relating to the pricing of gas for a portion of its anticipated production.  The Fund had no derivative financial instruments prior to January 2010.
  During the year ended December 31, 2010, the Fund’s derivative instrument income consisted of realized gains totaling $90 thousand.
 
 5.   Oil and Gas Properties
 
 Leasehold acquisition and exploratory drilling costs are capitalized pending determination of whether the well has found proved reserves.  Unproved properties are assessed on a quarterly basis by evaluating and monitoring if sufficient progress is made on assessing the reserves.  At December 31, 2010, the Fund had no projects with capitalized exploratory well costs in excess of one year.  The following table reflects the net changes in unproved properties for the years ended December 31, 2010 and 2009.
 
 2010


2009(in thousands)Balance, beginning of year

$
989


$
-Additions to capitalized exploratory well costspending the determination of proved reserves


330



989Reclassifications to proved properties based onthe determination of proved reserves


(1,220
)


-Capitalized exploratory well costs charged toexpense


-



-Balance, end of year

$
99


$
989
 
 In October 2009, the Fund purchased a 2.5% working interest in two undeveloped wells with proved reserves for a total purchase price of $4.9 million, which approximated fair value at the acquisition date.
 
 Capitalized exploratory well costs are expensed as dry-hole costs in the event that reserves are not found or are not in sufficient quantities to complete the well and develop the field.  At times, the Fund receives credits on certain wells from their respective operators upon review and audit of the wells’ costs.  Dry-hole costs, inclusive of such credits, are detailed in the following table.
  F-10
 Table of Contents
 Year ended December 31,Lease Block

2010


2009(in thousands)South Timbalier 287

$
99


$
416Eagle Project


(66
)


1,388Other wells


(27
)


(203
)$
6


$
1,601
 6.   Distributions
 
 Distributions to shareholders are allocated in proportion to the number of shares held.  The Manager determines whether available cash from operations, as defined in the LLC Agreement, will be distributed.  Such distributions are allocated 85% to the shareholders and 15% to the Manager, as required by the LLC Agreement.
 
 Available cash from dispositions, as defined in the LLC Agreement, will be paid 99% to shareholders and 1% to the Manager until the shareholders have received total distributions equal to their capital contributions.  After shareholders have received distributions equal to their capital contributions, 85% of available cash from dispositions will be distributed to shareholders and 15% to the Manager.
 
 7.   Related Parties
 
 The LLC Agreement provides that the Manager render management, administrative and advisory services.  For such services, the Manager is paid an annual management fee, payable monthly, of 2.5% of total capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund.  Management fees for each of the years ended December 31, 2010 and 2009 were $1.7 million.
 
 The Manager is entitled to receive a 15% interest in cash distributions made by the Fund.   Distributions paid to the Manager forthe years ended December 31, 2010 and 2009were $0.9 million and $0.3 million, respectively.
 
 At times, short-term payables and receivables, which do not bear interest, arise from transactions with affiliates in the ordinary course of business.
 
 None of the compensation paid to the Manager has been derived as a result of arm’s length negotiations.
 
 The Fund has working interest ownership in certain projects to acquire and develop oil and natural gas projects with other entities that are likewise managed by the Manager.
 
 8.   Fair Value Measurements
  At December 31, 2010 and 2009, cash and cash equivalents, production receivable, salvage fund and accrued expenses approximate fair value.
  9.   Commitments and Contingencies
 
 Capital Commitments
 The Fund has entered into multiple agreements for the drilling and development of its investment properties.  The estimated capital expenditures associated with these agreements vary depending on the stage of development on a property-by-property basis.  As of December 31, 2010, the Fund had committed to spend an additional $2.8 million related to its investment properties, of which $1.6 million is expected to be spent during the next twelve months.
 
 Environmental Considerations
 The exploration for and development of oil and natural gas involves the extraction, production and transportation of materials which, under certain conditions, can be hazardous or cause environmental pollution problems.  The Manager and operators of the Fund’s properties are continually taking action they believe appropriate to satisfy applicable federal, state and local environmental regulations and do not currently anticipate that compliance with federal, state and local environmental regulations will have a material adverse effect upon capital expenditures, results of operations or the competitive position of the Fund in the oil and gas industry.  However, due to the significant public and governmental interest in environmental matters related to those activities, the Manager cannot predict the effects of possible future legislation, rule changes, or governmental or private claims.  At December 31, 2010 and 2009, there were no known environmental contingencies that required the Fund to record a liability.
  F-11
 Table of Contents
  In response to the recent oil spill in the Gulf of Mexico, the United States Congress is considering a number of legislative proposals relating to the upstream oil and gas industry both onshore and offshore.  Such proposals could result in significant additional laws or regulations governing the Fund’s operations in the United States, including a proposal to raise or eliminate the cap on liability for oil spill cleanups under the Oil Pollution Act of 1990. Although it is not possible at this time to predict whether proposed legislation or regulations will be adopted as initially written, if at all, or how legislation or new regulation that may be adopted would impact our business, any such future laws and regulations could result in increased compliance costs or additional operating restrictions, which could have a material adverse effect on the Fund’s operating results and cash flows.
 
 Insurance Coverage
 The Fund is subject to all risks inherent in the exploration for and development of oil and natural gas. Insurance coverage as is customary for entities engaged in similar operations is maintained, but losses may occur from uninsurable risks or amounts in excess of existing insurance coverage.  The occurrence of an event that is not insured or not fully insured could have an adverse impact upon earnings and financial position.  Moreover, insurance is obtained as a package covering all of the funds managed by the Manager.  Claims made by other funds managed by the Manager can reduce or eliminate insurance for the Fund.
 
 10.   Subsequent Events
  On March 1, 2011, the Fund was notified by the operator of the Whistler Project that the well had reached the end of its economic life, and that the production handling agreement entered into for the Whistler Project, had been terminated.  As a result, for the year ended December 31, 2010, the Fund recorded an impairment of oil and gas properties related to a revision to reserve estimates.  See Note 2.  “Summary of Significant Accounting Policies - Impairment of Long-Lived Assets,” for additional information regarding the impairment.
 
 F-12
 Table of Contents
 
 Ridgewood Energy P Fund, LLC
 Supplementary Financial Information
 Information about Oil and Gas Producing Activities - Unaudited
  In accordance with the Financial Accounting Standards Board guidance on disclosures of oil and gas producing activities, this section provides supplementary information on oil and gas exploration and producing activities of the Fund. The Fund is engaged solely in oil and gas activities, all of which are currently located in the United States offshore waters of Louisiana in the Gulf of Mexico.
  Table I - Capitalized Costs Relating to Oil and Gas Producing ActivitiesDecember 31,2010


2009(in thousands)Advances to operators for working interests and expenditures

$
226


$
-Unproved properties


99



989Proved properties


38,747



35,775Total oil and gas properties


39,072



36,764Accumulated depletion and amortization


(25,975
)


(18,625
)Oil and gas properties, net

$
13,097


$
18,139
  Table II - Costs Incurred in Oil and Gas Property Acquisition, Exploration, and DevelopmentYear ended December 31,2010


2009(in thousands)Exploration costs

$
(20
)

$
2,368Acquisition of properties - proved


-



4,862Development costs


2,263



1,938$
2,243


$
9,168
  F-13
 Table of Contents
  Table III - Reserve Quantity InformationOil and gas reserves of the Fund have been estimated by an independent petroleum engineer, Ryder Scott Company, L.P. at December 31, 2010 and 2009. These reserve disclosures have been prepared in compliance with the Securities and Exchange Commission rules. Due to inherent uncertainties and the limited nature of recovery data, estimates of reserve information are subject to change as additional information becomes available.December 31, 2010


December 31, 2009United StatesOil (BBLS)


Gas (MCF)


Oil (BBLS)


Gas (MCF)Proved developed and undeveloped reserves:Beginning of year


170,770



1,329,542



166,688



1,518,296Extensions and discoveries


8,117



1,154,014



-



-Purchases of minerals in place


-



-



56,704



241,403Revisions of previous estimates(a)


73,041



276,080



(361
)


241,682Production


(61,402
)


(1,009,386
)


(52,261
)


(671,839
)End of year


190,526



1,750,250



170,770



1,329,542Proved developed reserves:Beginning of year


114,066



782,603



166,688



1,212,496End of year


186,517



1,189,125



114,066



782,603Proved undeveloped reserves:Beginning of year


56,704



546,939



-



305,800End of year


4,009



561,125



56,704



546,939(a) Revisions of estimates are attributable to well performance.
   Table IV - Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas ReservesSummarized in the following table is information for the Fund with respect to the standardized measure of discounted future net cash flows relating to proved oil and gas reserves. At December 31, 2010 and 2009, future cash inflows were determined based on average first-of-the-month pricing for the prior twelve-month period. Future production and development costs are derived based on current costs assuming continuation of existing economic conditions.December 31,2010


2009(in thousands)Future cash inflows

$
23,095


$
15,361Future production costs


(2,297
)


(2,264
)Future development costs


(3,885
)


(2,532
)Future ad valorem taxes


(26
)


-Future net cash flows


16,887



10,56510% annual discount for estimated timing of cash flows


(2,714
)


(1,702
)Standardized measure of discounted future net cash flows

$
14,173


$
8,863
  F-14
 Table of Contents
  Table V - Changes in the Standardized Measure for Discounted Cash FlowsThe changes in present values between years, which can be significant, reflect changes in estimated proved reserve quantities and prices and assumptions used in forecasting production volumes and costs.Year ended December 31,2010


2009(in thousands)Net change in sales and transfer prices and in production costs

related to future production

$
5,809


$
(807
)Sales and transfers of oil and gas produced during the period


(8,076
)


(5,022
)Net change due to extensions, discoveries, and improved recovery


3,397



-Net change due to purchases and sales of minerals in place


-



1,894Changes in estimated future development costs


(316
)


900Net change due to revisions in quantities estimates


3,274



1,085Accretion of discount


886



1,017Other


336



(377
)Aggregate change in the standardized measure of discounted future net cash flows for the year

$
5,310


$
(1,310
)
  It is necessary to emphasize that the data presented should not be viewed as representing the expected cash flow from, or current value of, existing proved reserves as the computations are based on a number of estimates. Reserve quantities cannot be measured with precision and their estimation requires many judgmental determinations and frequent revisions. The required projection of production and related expenditures over time requires further estimates with respect to pipeline availability, rates and governmental control. Actual future prices and costs are likely to be substantially different from the current price and cost estimates utilized in the computation of reported amounts. Any analysis or evaluation of the reported amounts should give specific recognition to the computational methods utilized and the limitation inherent therein.